All Forum Posts by: Kenneth LaVoie

My opinion: They're self righteous. Haha. 

But seriously, when I hear people puffing their egos up like that I do try to listen past the self righteousness to see if there's some truth there. We are all biased toward over confidence. It's how we dare build skyscrapers. If we only believed we could do what we're ACTUALLY competent to do, skyscrapers would be 3 stories tall and we'd be crossing rivers in barges still to this day. 

Also, it's tricky but I believe it's crucial to separate the message from the messenger. That is to say, just because a blowhard self righteous pr*ck is telling you it's stupid to invest in San Diego, or that if it's on the MLS it's already too late to get a good deal, doesn't mean it's NOT true.

@Wendell Fong, I love that quote. It really is the truth. We were always told that "you have to do everything yourself or you won't make any cash flow." I simply refused to accept that. (Not refused to BELIEVE it but refused to accept it)

i bought this building for 170K with 17K down in 2011, and had losses first two years. Then profits straight through. We are selling TODAY for 335K. Does the above copy and paste, using IRR function represent a pretty accurate view of my return? I am thinking that maybe I should combine first year's loss of 18~ with the down payment??

Thanks for any feedback. Different ways I've tweaked this all come pretty close. Up to 41% down to 37 and I just want to be sure I'm on the right track. 

I signed up to be an ACH originator at my local bank Kennebec Savings Bank. $10 per month minimum fee, otherwise .10 per item. No extra for "same day" ACH's. They're unique though. I've tried a couple other banks and the fees are incredible.  You CAN have them do "over the counter" at your own bank. We do this also at KSB. Tenants walk in and pay their rent to a teller. I can then see their cancelled check (or indication that it's cash) online. 

I actually get a blink of anxiety when I got to do a forum post. I've never ever seen a less intuitive interface. Perhaps a simple drop down, or a visible list that you click on. In other words, the FIRST thing you do is navigate to the forum you want to post in, then click "add post" vs. having the "create post" button front and center. The best way to set it up has already been invented, I'd say just mimic that. (i.e. look at early-retirement.org or similar)

While I'm at it, what's the "truest" measure of my "IRR" or CAGR? I'd maybe assume that the "positive cash flow" years are "withdrawals" while the few negatives are "deposits"?

So...the question I need a "boot in the rearend" on is this: I have a 7 unit I bought for 170K in 2011. Under contract for 350K today but appraisal came in at 310K. We're financing 15% of 350K purchase price. I haven't done any renegotiating yet but want to prepare myself. 

Assuming they'll want us to come down, what are some questions I can ask myself to help me decide how MUCH? I was fortunate enough to use another "free and clear" SFH as collateral so only had to put 10% down. So "All in" was $14,500.

PL each year was, starting in 2011

-18,000

-2,200

1,360

17,500

30,500

22,400

29,400

25,800

10,000

42,000 in 2020 to date (less maintenance, etc. due to covid, lower oil use and price)

Assuming things "average out" it will generate $25,000-$35,000 per year from here on out. (NOT inc. deduction for "self managing")

Ideas? Maybe seller finance a little more, also come down a bit, say 10K? Ask agent to take 2.5% vs. 3% "buyer's agent commission?"

OR...scrap the deal and leave it to my daughter with our other 4 buildings, haha!

So sorry Deisy. To be honest, I've been uncertain like this before too, ESPECIALLY with rooves. Rooves are difficult for the layman to assess. I have one roofing guy who I use now. I've given him enough money that I only hope he's treating me well. Reading some of your content, I'm getting the impression that it's the amount of "unknown' that's the cause of the stress. I now have a "go to" for MOST areas (roofing is still a little gray and I can't find anyone to take on a certain plowing / shoveling job) but outside that, I'm covered, and ANYTIME in the past I've felt stressed, it's BECAUSE I didn't have a system and go to guy for a particular problem. What I've found with situations where you feel like you want to get out, and that EVERYTHING sucks, is that the "stress needle" is just pushed a BIT too far over into the red zone. Suddenly you find ONE lawyer, one handyman or even one good plow guy, and that needle sinks back into the yellow...maybe even green zone. It's often that simple. 

I've always had one document for removing a tenant from a lease (in the case of roommates where one stays and one goes), and another for adding a new tenant, if that were the case. Instead I'm considering just doing a "new lease" to make things cleaner. The only thing that worries me is the security deposit. When roommates move in, we make it a big deal to educate them on the "security deposit goes with the apartment, not the tenant" bit. Meaning if one tenant moves out, we do NO under any circumstances refund their "share" of the security deposit. They work that out amongst themselves. This is pretty clear and simple with my old way of adding / subtracting but with signing a new lease, am I somehow setting myself up to wipe the slate clean and refund one party leaving?

My FAVORITE locale is Boothbay Harbor. A billionaire (founder of Pinnacle Vodka, can't remember name) has plowed enormous money into it, with the hopes of making it a "high end destination". (I hate the idea, I tend to be a "go slow" kinda guy). But it might put upward pressure on prices, STR potential. This area is called "midcoast maine" and I believe it's the best by far. I don't like Southern Maine (Portland, etc.) Picture a Maine themed "Epcot" in Massachusets, and you have Portland. There's very little "genuine Maine" about it any more and prices are irrational. Midcoast I think may be slightly more than two hours from Acadia but not much. What I DONT like about "downeast" (Acadia area, Bar Harbor, etc.) is the weather. EARLY JULY is still light jacket weather often. Completely different climate than midcoast. My grandparents built a house in 1972 in East Boothbay, hence my knowledge of that area. My two cents.

As an update, we sold an 11 unit building to  NY investor for 380K, and as a "kicker" sold him the 2 unit I'm talking about for 78K bu 100% seller financed with a 6 year balloon (3 years away now). It ended up (or will end up) being an 18% YOY annual return on our invested capital over the 7 year holding period. That is artificially low because there was never a mortgage, it was a complete cash deal.